Lecture 7 -Creating an innovation culture

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Transcript of Lecture 7 -Creating an innovation culture

Creating an Innovative CultureLecture 7Organizational culture and innovationCulture: The set of values, understandings, and ways of thinking that is shared by the majority of members of an organizationIdeaGenerationIdeaSelectionImplementationInnovation strategyCreating an innovation cultureLecture 2Lecture 4Lecture 5Lecture 6CultureAtmosphereRecognitionLeadership and visionChange managementParticipationRisk takingProject teamsCross-functional teamsChampionsProject-to-project learningElements of organizational cultureCultureOrganizational structuresPower structuresSymbolsStoriesRoutines and ritualsControl systemsDetermine the current state of the cultureIdentify a 'desired' stateDetermine the necessary steps to shift the culturehttp://goo.gl/A2QG1Elements of cultureTeam typesDiversity, psychological safety, learning, leadershipInnovative culture at PixarOrganizational culture and innovationCreating an innovative culture:Creating an incubating and inter-connected space where ideas could develop, mingle, interact and re-create.Figure 8.3: The Current Cultural Web for BuildCo1. Organizational StructuresHead of BusinessDevelopmentProcess ManagersProject leadersStage-Gate3 SymbolsGate Review BoardStage-Gate Manual4 StoriesBoard level discussionsManagement consultantsOperational problemsAlliances7. ParadigmCautiousCost cuttingWavering focusMust look busyAny progress is progress2. Power StructuresParent calls shotsBusiness units6. Control SystemsTime sheetsBudgetsStretch revenue targets5. Routines and RitualsMonthly/quarterly reportsProject planning workshopsGate Review meetingsFigure 8.4: The Desired Cultural Web for BuildCo 2. Power StructuresPower vested in a market focusBalance between business unit and parent 3. SymbolsSeamless business development horizonsNew recruitsActive labs 4. StoriesSuccesses with major new applicationsManagers’ courageous to challenge the status quo 1. Organizational StructuresManaging by projectsCross-functional teams 6. Control SystemsNon-revenue measuresRewards based on performanceTransparent performance 5. Routines and RitualsOptimum amount of easy reportingRegular project meetingsIdea generation sessions 7. ParadigmInnovativeEntrepreneurialResponsiveExternally focusedAggressively goal orientedConsider the firms that you have worked

Was the firm innovative?What were the key attributes of the organizational culture?Characteristics of an innovative cultureaccepting failurechallenging status quorisk takingpositive management attitudeauthority and initiative takingopen communicationreputation for innovativenessexperimentationinter-group alignmentcustomer focusTable 8.1: Best Practices for Achieving a ‘Culture of Innovation’1. Organizational structureBest practices:

CommunicationDisplays of innovation successes and other artefactsSymbolic recognition and awardsExamples:

Company logos and slogans are a symbol and some companies update them regularly to ensure the typeface and style is modern. AXA have developed the ‘Innovation Quadrant’, which has become both an internal symbol of innovation (for example, as a screen-saver) and a tool for communicating the meaning of innovation.The workplace and the reception area should celebrate innovation by displaying relevant product and process innovations: ‘artefacts’. Unilever has interesting displays of not only their product innovations but also their process improvements. Axa has an ‘innovation corridor’ (outside the staff canteen).Plaques, certificates and other recognition for innovative employees can become symbols.4. StoriesExamples:

3M ‘mavericks’; Sony Corporation’s Walkman. Managers can compare their style to Zien and Buckler’s typology, in order to learn how to use stories more effectively.5. Routines and ritualsExamples:

Promoting new ideas for products and process improvementsTolerating mistakes6. Control systemsBest practices:

Processes MetricsReward and recognitionExamples:

Most companies have introduced Stage-Gate or other formal NPD processes. Leading organizations have moved more to having a flexible process for the whole of innovation. Systems and processes to promote entrepreneurial thinking.Company goals and metrics are ‘cascaded to all levels’ (Schefenacker is particularly good at this). Canon set notoriously tough NPD goals.Rewards and recognition are linked to innovation closely, including employee performance appraisalsMaking project teams work1. DiversityDifferences between individuals on any attribute that may lead to the perception that another person is different from self (van Knippenberg & Schippers, 2007)

Simple to organize. Do not monopolise management time.Ideal for ‘tactical’ improvements to the day-to-day processes within a function.Disadvantages:

Team may miss opportunities, as they have a narrow perspective.Team learning is not applicable to cross-functional projects.Applications:

Kaizen projects in all functions.Developing a process orientation within the functions.Team StructuresAdvantages:

Bring together knowledge and responsibilities of all functions.Work well for projects where something similar has already been successfully completed.Require relatively low management commitment.Disadvantages:

Project manager has little formal power and so may not be able to control cross-functional differences.In competition for resources are likely to lose out to heavyweight teams.Applications:

Due to an experienced manager taking responsibility for the heavyweight team, it has more influence. Can use existing processes and resources.Disadvantages:

Require a very experienced manager to lead the project. May require significant amounts of management time.May not work well for new ventures, as they are too closely tied to the parent organization.Applications:

Next-generation or radical innovation projects (not recommended for low complexity projects).Heavyweight teams offer a good training ground for managers with top potential.Team StructuresAdvantages:

Autonomous teams are freed of the bureaucracy and overheads of the parent organization.Separate location reinforces the independence of the team.The team spirit will quickly encourage entrepreneurship.Disadvantages:

Radical approaches will test the capacity of the parent organization to accept change.Entrepreneurial management talent is hard to find.Applications:

New ventures, new products in new markets.Dealing with disruptive

technology.5. Virtual team structure:Members are selected from other organizations, but projected management remains in the focal organization.Team StructuresAdvantages:

Brings together levels of expertise not available in a single organization. Can be much faster moving than projects resourced internally.Such teams are entrepreneurial in nature.Disadvantages:

Are not co-located.Need good communication and a simple, effective innovation process.Sourcing outside expertise can be very expensive.Intellectual property rights (IPR) need to be carefully managed.Applications:

Fast-track’ projects.Development of new technology, where the internal competence does not exist.What are the main barriers to creating a ‘culture of innovation’?Main take awayTeam structure depends on type of innovation Team structure and process should be alignedWhat type of team structure and culture should be in place for teams seeking disruptive innovations?Source: Christensen (1997: 121)DiscussionDescribe the elements of innovation culture at PixarWhat are the existing controls in the seemingly autonomous team structures in this company?Do (should) innovation culture differ across industries and/or organizational layers?How could you overcome them?4. Transformational leadershipMaking project teams workOur researchhttp://www.unilever.com/aboutus/introductiontounilever/ourlogo/ouricons/